Aster DM Healthcare Ltd

- The company is exploring strategic partnerships, including potential private equity (PE) investment, to support inorganic growth and new initiatives in India. (Page 16) - Organic growth plans for India are largely self-funded through cash generation from existing businesses, with India generating sufficient cash for its organic expansion. (Page 16) - PE partnership is intended to be an add-on to accelerate inorganic growth and other strategic initiatives rather than replace organic funding. (Page 16) - No explicit mention of new debt fundraising for expansion; net debt position updated but no new debt plans disclosed. (Page 10, 9) - Dividend distribution of 70%-80% of upfront consideration from GCC sale planned, with the balance funds possibly used for inorganic expansion or debt reduction. (Page 16, 5) In summary, while active fundraising via PE is being evaluated for inorganic growth acceleration, organic growth remains primarily self-funded, with no explicit new debt or equity issuance announced as of now.

- For the first 9 months of FY24, capital expenditure was INR 287 crores, with nearly 60% allocated to expanding capacity. - Future plans include adding 1,700 beds by 2027 through a mix of brownfield (60%) and greenfield projects. - Brownfield expansions are ongoing in Kerala (e.g., Medcity) and Karnataka. - Greenfield projects include a 460-bed hospital in Trivandrum and a 250-bed hospital in Kasargod, Kerala. - Plans also involve inorganic expansion opportunities in neighboring geographies and states like Maharashtra and Uttar Pradesh. - Expansion strategy focuses on both large (500-bed) hospitals in metros and mid-sized (200-300 bed) hospitals in tier 2 and tier 3 cities. - Labs and pharmacies network is being optimized to break even and scale sustainably. - There's potential strategic partnership/PE fund deployment aimed largely at inorganic growth and new initiatives, supplementing organic plans. - Cost-saving initiatives and margin improvements are ongoing alongside expansion to ensure financial viability.

- India business expects robust growth, with revenue increasing 23% YoY to Rs 949 crores in Q3 FY24, driven by capacity expansion adding 750+ beds this year. - The healthcare market in India is projected to grow at 22% CAGR, reaching USD 638 billion by 2025. - Plans to add approximately 1,700 beds by FY27 to reach over 6,600 total bed capacity. - Mature hospitals show strong revenue growth (16% increase YoY) and improved margins. - New-age hospitals like Whitefield in Bangalore expected to ramp up quickly, achieving utilization of 60-70% and breakeven within 12 months. - ARPOB growth is sustainable at 8-9%, with current 9M period reflecting over 12% growth. - The lab business expected to break even by Q4 FY24; pharmacy to break even in 1-2 years. - Overall EBITDA margin expected to improve by 300-400 bps over next 2-3 years.

- India segment expects significant margin expansion with 300-400 basis points increase over the next 2-3 years driven by capacity expansions, higher occupancy, and cost optimization. - Consolidated EBITDA growth guided beyond current levels, with India hospitals and clinics segment targeting over 20% EBITDA margins sustainably. - New hospital expansions (including 1,700 beds in next 2-3 years) projected to drive revenue and profitability growth with limited EBITDA drag. - ARPOB (Average Revenue Per Occupied Bed) growth of 8-9% is sustainable, supporting revenue increases. - GCC operations show steady 14-15% revenue growth and improved operating EBITDA margins (~15% in Q3 FY24 vs 13.8% last year). - Overall consolidated EBITDA grew 28% YoY to INR 583 crore in Q3 FY24; adjusted PAT increased 53% YoY. - Plans include continued revenue assurance, operational efficiency, and selective inorganic growth with potential PE partnership to accelerate value creation. - Dividend pay-out expected at 70-80%, with balance to support growth or debt reduction. Overall outlook indicates healthy double-digit earnings and operating profit growth in the medium term.

- There is a pipeline of approximately 1,700 beds planned for expansion. - Of these, around 450 beds are part of a greenfield project at Aster Capital, Trivandrum. - Another greenfield project is underway in Kasargod, Kerala, with approximately 254 beds. - The majority of the remaining pipeline consists of brownfield expansions or O&M (Operation & Management) projects. - Operational beds awaiting activation—around 250 to 300—are ready with equipment and furnishings in three locations: Guntur (Andhra Pradesh), Aster Whitefield Hospital expansion (phase two with 150 beds pending), and Aster G Madegowda Hospital. - Capacity expansion focuses both on asset-light O&M models and greenfield projects, aiming to optimize operational efficiency and financial viability.